Best Practices Procurement Manual – Appendix B.5 Bart Purchase Card System                     Page 1

                                            APPENDIX B.5
                               BART PURCHASE CARD SYSTEM
        The BART purchase card system provides a means for using credit cards for small
        The regulations governing the use of the BART purchase cards are set forth in the
        District's Procurement Manual, Chapter V, Section [.] Micropurchase procedures and
        other related sections.
        The system contains specific procedures for use by procurement personnel as well as
        a wide range of individuals who participate in the purchase card program. These
        procedures integrate diverse regulatory and operational information from numerous
        sources in a user-oriented document.
        The Supervisor, Procurement Administration has been designated by the Department
        Manager, Procurement as the focal point for applications, issuance and destruction of
        cards, establishment of reports, and administrative training for this Program.
        The State of California ("State") has awarded a contract for statewide commercial credit
        card services to Rocky Mountain BankCard System, Inc. ("contractor"). The contract was
        intended to provide, at the request of state ordering agencies, state-wide commercial
        purchase cards and associated services to state employees for the purpose of paying for
        purchases made for official state purposes.
        In 1995, the State made these services available to any of its political subdivisions of
        which BART as a public utility district qualifies for participation in the program. On
        July 1, 1996, the District commenced its program and issued these procedures.
        These procedures are designed to supplement the District's Procurement Manual and
        any "Instructions for the Use of the District Purchase Card" distributed to the
        cardholder and "Approving Official Instructions for the Use of the District Purchase
        Card" distributed to the approving official at the time the card is issued. In the event
        these procedures conflict with any instructions provided by the contractor, these
        procedures take precedent.
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        "Approving Official" means the person who reviews and approves the cardholder's
        monthly statement of purchases.
        "Cardholder" means the District employee to whom a card is issued. The card bears
        this cardholder's name and may only be used by this individual to pay for authorized
        District purchases.
        "Contractor" means the organization that will maintain all accounts as required by the
        State contract.
        "Oral procedure" means a procedure where an order is placed or a purchase is made
        through an oral agreement which is made in person or by telephone by providing the
        card for imprint by the Merchant or the card number to the Merchant. No written
        purchase order or contract is issued by the District. The supplies or services are
        provided by the Merchant and payment is made using the District Purchase card.
        "Statement of Account" is a monthly listing of all payments authorized for purchase
        and credits made by the cardholder and billed by the merchant.
4.1     As approved by the Procurement Department, the contractor will issue cards to
        designated cardholders and send out monthly statements to cardholders, approving
        officials, and the District Controller's office. The contractor will pay merchants in a
        timely manner and will receive reimbursement from BART.
4.2     The Supervisor, Procurement Administration will serve as the liaison between the District
        and the contractor and subject to the direction of the Department Manager, Procurement,
        shall oversee the program and establish District guidelines. This individual shall establish
        authorization codes for controlling purchases as well as approve changes to dollar
        limitations or authorized merchant codes.
4.3     Each cardholder is to reconcile his/her monthly statement and forward the reconciled
        statement to his/her approving official consistent with instruction issued by Procurement
4.4     The approving official will review the cardholder's monthly statement and serve as liaison
        with Procurement Administration and the Controller's Office. Each approving official
        shall establish, after coordination with Procurement Administration, a budgetary limit for
        each cardholder's monthly purchases.
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        The approving official will certify the cardholder's monthly statements and ensure that
        payments are for purchases which are authorized and made in accordance with the
        District's Procurement Manual and these procedures.
        The approving official will also assist the cardholder in resolving disputed payments.
        Either the approving official or the Department Manager, Procurement has authority to
        direct Procurement Administration to instruct the contractor to cancel a card at any time.
4.4.1 This approving authority nominally rests with the Sponsoring or Using Department
      Manager and may not be further redelegated other than for temporary absences without
      the concurrence of the Department Manager, Procurement.
        Generally, this authority should be redelegated where the Division Manager function
        oversees 50 employees or more. Any such redelegation on a standing basis such as
        mentioned above, must be reviewed at least semi-annually by the supervisor as part of
        employees performance evaluation. Any pertinent information coming out of these
        reviews should be separately summarized and transmitted to the Procurement Department
        for their review.
4.5     Procurement Administration shall establish a budgetary limit for each office that does not
        exceed the sum of the approving official's cardholders' monthly purchase limits. This
        should be reviewed quarterly and adjusted if necessary to reflect the cardholders' actual
        spending patterns and minimize the risk to the District of a spending overrun in the fourth
        quarter of the then current fiscal year.
        Procurement Administration shall also coordinate, process and monitor resolution of all
        disputed purchases, credits or billing errors, unless the Department Manager,
        Procurement designates another individual or office to perform this function.
4.6     District Controller's Office shall answer the contractor's questions about payment of
        monthly statements as well as make payments under this program.
5.1     The Purchase card may be used to pay for small purchases made in accordance with
        Chapter V of the District's Procurement Manual and these procedures. It may also be used
        to pay for orders placed against established requirements contracts or with established
        sources of supply, when authorized by the contract or regulation requiring use of the
        source. However, District inventories should be checked for availability prior to making a
        purchase using the card.
5.2     The Purchase card can be used to pay for supplies or services acquired using oral
        solicitation procedures. It may also be used to pay for supplies or services that are
        acquired through a purchase order or an individual order under a requirements contract
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        where the contract specifically allows such payment method.
5.3     Without exception, the Purchase card may only be used to pay for authorized District
5.4     Under no circumstances, will the Purchase card be used for cash advances.
        The contractor will provide Procurement Administration with all the necessary
        application forms (cardholder, approving official, disputes, destruction notice etc.).
        The Sponsoring Department will request that Procurement issue purchase card(s) to
        named District employee(s) and assure funding of such purchases by using the Bulk
        funding procedure in BART's Procurement Manual, Chapter V.
        Subject to the procurement authority delegation procedures in the Procurement
        Manual, Chapter I, Procurement Administration will distribute the forms to selected
        cardholders and approving officials for completion.
        The Cardholder(s) and Approving Official will complete the forms indicating they
        understand the terms of its use and will agree to abide by these procedures. The cards
        are issued for a one year period and will be subject to review by the Procurement
        Department each year prior to renewal. (Other organizational functions at BART,
        such as Internal Audit or Civil Rights, may review usage of the purchase card by the
        Sponsoring Department.)
        Upon completion, Procurement Administration shall process and forward the forms to
        the contractor and then issue the cards to the sponsoring department when received.
        The contractor is capable of providing various reports to meet management and
        administrative needs. During the account setup process, Procurement Administration
        will discuss the various reports available with Sponsoring Department management
        When the account information is submitted to Procurement Administration, a
        signature card must be completed by each approving official that states the approving
        official may approve the accuracy of the Statement of Account for payment. The
        signature card will be forwarded to the Controller's office by Procurement
        Administration after completion.
        Sponsoring departments are responsible for delegating Approving Official authority
        as necessary to avoid statement processing delays and late payment penalties.

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        Use of the purchase card by a cardholder is subject to a single purchase limit and a
        monthly cardholder limit. The purpose of these dollar limits is as follows
        "Single Purchase Limit" is a limitation on the procurement authority ("micropurchase
        authority") delegated to the cardholder by the Department Manager, Procurement
        consistent with the requirements of the District's Procurement Manual, Chapter I. This
        limit cannot be exceeded unless a revised delegation of authority is issued by the
        Department Manager, Procurement or his or her designee, raising the limit.
        (A "single purchase" using the card may include multiple items. However, no single
        purchases may exceed the authorized single purchase limit established for each
        "Monthly Cardholder Limit" is a budgetary limit assigned by the approving official and
        may be modified if necessary by the Procurement Department. The approving official
        shall coordinate with Procurement Administration when determining a monthly limit and
        should reflect spending history as well as budgetary trends. The total dollar value of
        purchases when using the card for any single month may not exceed the monthly purchase
        limit set by the approving official subject to concurrence by the Procurement Department.
9.1     The unique Purchase card VISA card that the cardholder receives, may be used only by
        that cardholder.
9.2     No other person is authorized to use the card and the card may only be issued to District
        employees. The card was specially designed showing the District logo imprinted upon it
        to avoid being mistaken for a personal purchase card.
9.3     When issuing this card to an employee, authorization codes will be established by
        Procurement Administration and will be incorporated in the card. Under normal
        circumstances, merchants are required to obtain authorization from the contractor for
        purchases over $50.00. However, many merchants now use electronic authorization
        methods allowing them to obtain authorization for all purchases regardless of amount.
        When authorization is sought for a purchase by the merchant, the contractor authorization
        system will electronically check each individual cardholder's single purchase and monthly
        limits, the monthly office limit, and the type of merchant where the cardholder is making
        the purchase before authorization for the transaction will be granted.
9.4     Use of the card must meet the following conditions:
        (1) The total of a single purchase to be paid for using the card may be comprised of
        multiple items and cannot exceed the authorized single purchase limit. Purchases will be

        denied if the authorized single purchase limit is exceeded. Payment for purchases may not
        be split in order to stay within the single purchase limit.
        (2) All items purchased over the counter to be paid for using the card must be
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        immediately available. No back ordering is allowed as well as deposits for special orders.
        (3) All items purchased by a telephone order that will not be confirmed with a written
        order and be paid for using the card should generally be delivered by the merchant within
        the 30-day billing cycle. However, a longer period (up to 120 days for delivery) may be
        utilized by Sponsoring Departments. If the longer period is elected, procedures need to be
        established by the Sponsoring Department for proper reconciliation of the monthly bills,
        allowing for the carrying forward of items ordered but not received.
        (4) All items purchased during one telephone transaction that will not be confirmed by a
        written order should generally be delivered in a single delivery. If a Sponsoring
        Department elects to allow partial deliveries, Sponsoring Department procedures must be
        implemented to ensure proper reconciliation of all such orders.
        (5)The Purchase card may not be used to purchase personal property items over $1,000 in
        value unless purchased with the Controller's office concurrence prior to purchase; so the
        proper tagging can be done and the required accountability established.
        (6) When purchasing items by phone or over the counter, the cardholder should inform
        the merchant that the purchase is subject to state and local tax. Contact the Controller's
        office for questions in this area.
        (7) At the beginning of each District fiscal year and prior to the use of the purchase cards,
        the Sponsoring Department shall certify that funds as available using the bulk funding
        procedures in the District's Procurement Manual, Chapter V.
        Unless otherwise approved in writing by the Department Manager, Procurement, the card
        must not be used for the following:
        (1) Cash advances;
        (2) Rental or lease of motor vehicles;
        (3) Rental or lease of land or buildings;
        (4) Purchase of airline, bus, train, or other travel related tickets;
        (5) Purchase of meals, drinks, lodging, or other travel or subsistence costs;
        (6) Purchase of gasoline or oil for District automotive vehicles;
        (7) Repair of District automotive vehicles; and
        (8) Telephone calls
11.1     When making purchases that will be paid for using the Purchase card, all the applicable
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        acquisition regulations apply. Regardless of whether the open market purchase is made
        using oral procedures or using a written purchase order or contract, the cardholder must:
        (1) Ensure that funds are available and certified to pay for the items being
        purchased. A funded Purchase Request (PR) shall support each credit card
        purchase. The PR may be bulk funded.
        (2) Be aware of the District's commitment to DBE firms and they will be held
        accountable for their DBE participation during the fiscal year.
        (3) Solicit competition for purchases
11.2.1 Users should be aware that it is common commercial practice for banks to charge
       merchants for their participation in purchase card programs by "discounting" their
       payment by 2 to as much as 15% of the total charge. A $100 bill to the customer and paid
       to the bank in a monthly statement may only represent $98 to $85 in actual revenue to the
       merchant from the bank. Merchants are aware of this and restrained only by competition,
       will adjust their pricing to reflect these costs; or they will offer their customers a cash
11.2.2 It is against District policy to pay any type of a "surcharge" to a Merchant, offsetting the
       bank discount. Likewise, users should not agree to a Merchant's request to revise the price
       above what the general public pays for an item in order to make up for the bank's
11.3.1 Users should also be aware that proper functioning of this program rests upon timely
       payments to the Contractor. Disputes should be handled through the Merchant, not the
       Contractor. Users must know the refund, exchange and warranty terms offered by the
       Merchant prior to making the purchase. Adjustment of purchases of defective materials
       from merchants is the responsibility of the sponsoring department and not the
       Procurement Department, or the Contractor.
11.3.2 It is District policy to purchase goods, materials, or equipment only from those Merchants
       that offer the District full refund or exchange rights at the District's discretion. Such rights
       shall be in writing, either transmitted to the District employee, or otherwise publicly
11.4    Oral solicitations should be used whenever possible within the local trade area. "Local
        trade area" is defined as the three county area that encompasses the District.
11.5    Written solicitations are recommended to be used when (I) a large number of line items
        are included in a single proposed acquisition, (ii) obtaining oral quotations is not
        considered economical or practical, (iii) special specifications are required because items
        or services cannot be easily explained or (iv) Merchants are located outside the local trade
11.6    Purchases not in excess of $2,500 may be accomplished without securing competition if
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        the cardholder (functioning as the contracting officer) considers the prices to be
11.6.1 Generally speaking, the District's pricing objective in making micropurchases, is to obtain
       the same price that the general public would pay for the item if they were buying such an
       item in similar circumstances and quantities.
        If the item is not a broadly distributed commercial product, then the District's pricing
        objective is to achieve the same terms as that of the Merchant's most favored customer if
11.6.2 These purchases are to be distributed equitably among qualified Merchants by means of
       Merchant rotation. If practical, other than the previous Merchant should be solicited when
       placing repeat orders.
11.7    A reasonable number of sources must be solicited (at least three) for purchases over
        $2,500. If practical, two of these sources shall not have been previously solicited. If
        merchants furnish standing price quotations or catalog prices on a recurring basis,
        verifying the quotations or prices for individual purchases is not necessary, but the prices
        should be periodically confirmed as current. When determining the number of sources to
        solicit, consider (I) the nature of the item or service to be purchased and whether it is
        highly competitive, (ii) information from recent purchases of the same or similar item or
        service, (iii) the urgency of the purchase, (iv) the dollar value of the purchase, and (v) past
        experience concerning merchants' prices.
11.8    Cardholders are not required to document their purchases under $2,500 with respect to
        competition or reasonableness of price unless (1) The District employee has reasonable
        basis to suspect or has other information to indicate the price may not be reasonable or (2)
        it is the purchase of an item for which no comparable pricing information is available.
        The monthly invoice approval package transmitted to the approving official must contain
        an explanation of how price reasonableness was determined in those instances.
11.9    Oral Purchase Procedures
        Oral procedures may be used to acquire supplies or services that can be described in
        sufficient detail so that the parties to the agreement have a clear understanding of what is
        being acquired; and a purchase order or contract is not required by either the Merchant or
        the District.
        When placing a telephone order to be paid using the Purchase card, the cardholder will:
        (1) Notify the Merchant that the purchase is subject to state and local taxes.
        (2) Confirm that the Merchant is aware of all required District terms and
        (3) Confirm that the Merchant agrees to charge the purchase card when shipment
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        is made so that receipt of the supplies may be certified on the monthly Statement
        of Account.
        (4) Instruct the Merchant to include the following information with the shipping
        documents or packing slip:
            (i) Cardholder name and mail code;
            (ii) Building number, room number, street address, city and state;
            (iii) Cardholder telephone number;
            (iv) The term: Purchase card;
            (v) Purchase Request or Purchase Order Number.
        This information will alert the receiving offices and the requisitioner that the supplies
        have been purchased with the purchase card.
        A log should be used to document or record telephone purchase card orders of $2,500 or
        less when competitive quotes are not solicited. If competitive quotes are solicited for
        purchases of $2,500 or less, or if the purchase exceeds $2,500 and therefore requires
        competition (Procurement staff only), the record shall be documented.
        The documentation should be held until the monthly billing statement is received and
        then attached to the statement when it is submitted to the approving official.
11.10 Purchases Requiring the Issuance of a Written Order or Contract
        If the Purchase card is used to pay for a purchase made by using one of the purchase order
        or contract forms, the Merchant should be provided the necessary information from the
        card orally, either in person or by telephone, and the statement "Payment to be made by
        purchase card" should be inserted on the form. Do not include specific information from
        the card on the purchase order. If the Merchant requires an order, an authorized
        Sponsoring Department form may be used. The Merchant is given its copy of the
        purchase order and the cardholder maintains a copy.
12.1    Any time a purchase is made that will be paid using the card, whether it is done over the
        counter or by telephone, a document must be retained as proof of purchase. These
        documents will later be used to verify the purchases shown on the cardholder monthly

        (1) When a purchase is made over the counter, the cardholder is to obtain a customer
        copy of the charge slip, which will become the accountable document (make sure all
        carbons are destroyed).
        (2) When making purchases by phone, the cardholder is to document the transaction on a
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        log, annotate the PR, and attach any shipping documents associated with the order.
12.2    The contractor will provide and distribute three monthly statements within five working
        days after the end of the 30-day billing cycle.
        (1) Cardholder - will receive a statement showing all purchases, credits and other data on
        transactions the cardholder has made in the 30-day billing cycle.
        (2) Approving official - will receive a copy of all cardholder statements for which he/she
        has approving authority and a summary sheet for these statements.
        (3) Controller's Office - will receive a statement providing summary data by
        cardholder and approving official.
12.3    At the end of each monthly billing cycle, the cardholder must reconcile the information
        on his/her statement. The cardholder must fill in the appropriate accounting classification
        in the accounting code block, if not the same as the Master Accounting Code, the
        organization or individual for whom the purchase was made, and a description, if not
        provided, for each purchase. The cardholder must then sign the statement, attach all
        supporting documentation and forward it to the approving official or designated alternate.
        It is important that the cardholder check each purchase on the statement to verify the
        accuracy. If an item has been returned and a credit voucher received, the cardholder will
        verify that the credit is reflected on the statement. If purchased items and credits are not
        on the next monthly statement, the transaction documentation will be retained by the
        cardholder until the purchase or credit appears on the statement. If the purchase or credit
        does not appear on the next monthly statement, the cardholder or approving official must
        notify the Administrative Office Contact to resolve and reconcile the statement.
12.4    If for some reason the cardholder does not have documentation of the transaction to send
        with the statement, he/she must attach an explanation that includes a description of the
        item, date of purchase, merchant's name and why there is not supporting documentation.
12.5    The cardholder must sign the monthly statement and forward it to the approving official
        within five working days of receipt. If the cardholder cannot review the statement at the
        time that it is received, the approving official is responsible for reviewing and certifying
        the cardholder's statement. The approving official will go over the cardholder's statement
        with the cardholder upon his/her return.
12.6    The approving official is responsible for the following:
        (1) Supplying the appropriate financial management office with the date services
        provided by the contractor were received and the date services were accepted. The date
        services were received will be the last day of the monthly billing cycle for the contractor.
        The date services were accepted will be the date the approving official signs the reverse
        side of the statement of account. If the approving official takes more than seven calendar
        days to accept the services, acceptance (for determining payment due date for compliance
        with prompt payment regulations only) will be deemed to occur seven calendar days after
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        receipt of the services. If any purchased items have not been received or accepted by the
        time the statement is received, the items should be disputed using the procedures in
        paragraph 13, in order to prevent payment delays. It is critical that this information be
        supplied in order to avoid late payment penalties.
        (2) Certifying and signing monthly cardholder-signed statements and summary
        (3) Forwarding signed cardholder statements and finance copies of receiving reports
        and supporting documents to the District's Controller's office for payment.
        (4) Forwarding monthly summary statements, and the cardholder statements to the
        District Controller's office in time to be received within 15 working days of receipt by
        the approving official to avoid late payment penalties;
        (5) Retaining copies of summary statements and fund certification, solicitation and
        award documentation as supporting documentation on purchases. Records retention
        and disposition procedures in BART's Procurement Manual, Chapter V, should be
        followed for documentation of purchases paid for using the purchase card.
13.1    If a cardholder receives a statement that lists a transaction for merchandise that has not
        been received, the cardholder (or the approving official) must first attempt to resolve the
        issue with the Merchant Generally speaking, this will mean that the bill gets paid in full,
        including the disputed charge and the merchant credit will clear in the following billing
        cycle This is somewhat of a departure from the normal business practices of the District.
        The reason is the administrative effort required on the part of the Contractor, Procurement
        department and Controller's office to track disputed items. (See also 11.3.1 and 11.3.2 of
        this Procedure requiring Sponsoring departments to conduct business only with those
        merchants that offer full refunds or exchanges.)
        In those instances where these procedures are not effective, Sponsoring Departments
        will notify Procurement Administration and complete the Cardholder Questioned item
        form. The contractor will credit the transaction until the dispute is resolved. In
        addition, a copy of the form must be attached to the cardholder's monthly statement
        and sent to the Controller's office.
13.2    If items purchased with the card are found to be defective, the cardholder has the
        responsibility to obtain replacement or correction of the item as soon as possible using the
        same procedures in Section 13.1 above. (See also 11.3.1 and 11.3.2 of this Procedure
        requiring Sponsoring departments to conduct business only with those merchants that
        offer full refunds or exchanges.)
        If the merchant refuses to replace or correct the faulty item, then the purchase of the
        item will be considered in dispute. Items in dispute are handled in the same manner as
        billing errors.
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13.3    If items purchased with the card don't include the appropriate amount of sales tax, the
        Sponsoring Department will communicate to the Controller's office with the monthly
        billing that the sales tax needs to be accrued for this item.
        The contractor should be contacted only to report a LOST OR STOLEN card using the
        telephone numbers given below in Section 15.0. All other questions should be directed to
        either Procurement Administration or the Controller's office.
15.1    If the card is lost or stolen, it is important that the cardholder immediately notify Rocky
        Mountain BankCard System, Inc., at the following numbers:
        (1) 24 hours a day, 7 days a week (Ask for I.M.P.A.C. customer service)
                (A)    1-800-227-6736
        (2) Automated authorization service number for use by merchants only
                (A)    1 - 800 - 525 - 5093
15.2    The cardholder must also notify the approving official of the lost or stolen card within
        one workday after discovering the card missing. The approving official must also notify
        BART Police at the same time they receive notice.
15.3    The approving official shall submit a written report to Procurement Administration within
        five workdays. The report will include:
        (1) the card number
        (2) the cardholder's complete name
        (3) the date and location of the loss
        (4) the date reported to BART police
        (5) date and time the contractor was notified
        (6) any purchase(s) made on the day the card was lost/stolen
        (7) any other pertinent information
15.4    A card that is subsequently found by the cardholder after being reported lost or stolen will
        be cut in half and given to his/her approving official. The approving official will complete
        the destruction notice and forward the notice to Procurement Administration and BART
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        It is the cardholder's responsibility to safeguard the purchase card and account number
        at all times. The cardholder must not allow anyone to use his/her card or account
        number. A violation of this trust will require that the card be withdrawn from the
        cardholder with the possibility of subsequent disciplinary action.
        Upon separation of a cardholder, the cardholder must surrender the card to his/her
        approving official who will complete the destruction notice and forward the notice to
        Procurement Administration.
        If a cardholder is transferred to another Department or Division with a different
        approving official, the new approving official must determine if the employee will
        continue to be a cardholder within his/her Department or Division. If it is determined
        that the card should be kept by the cardholder, the master file can be changed by
        requesting, in writing, that Procurement Administration have the contractor add the
        cardholder to the new approving official's responsibility and delete him/her from the
        old file without issuing a new card.
        A cardholder who makes unauthorized purchases or carelessly uses the card may be liable
        to BART for the total dollar amount of unauthorized purchases made in connection with
        the misuse or negligence. Also, the cardholder may be subjected to disciplinary action for
        unauthorized or careless use.
        BART will be liable for the use of Purchase cards by authorized users (cardholders)

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